Enabling the disabled – Complying with the BBBEE Act

October 1st, 2013

xBookmark

By Angela Newman

All things being equal, the workforce should reflect the employable part of the population. Employing people with disabilities is not only the right thing to do, but is also a good thing to do, or vice versa. However, not everyone does what is right and good and so the government stepped in in the form of, inter alia, the Constitution, the Employment Equity Act 55 of 1998 (EE Act) and the Broad-Based Black Economic Empowerment Act 53 of 2003 (BBBEE Act).

This legislation encourages certain businesses to employ people who have disabilities and sets targets for businesses for the employment of black people with disabilities. Businesses that comply are rewarded with broad-based black economic empowerment (BBBEE) points. The more BBBEE points a business has, the higher their BBBEE rating, and the more enticing that business is as a service provider or supplier, because this in turn enables the procurer to secure more BBBEE points.

Who are persons with disabilities?

As set out in the Integrated National Disability Strategy White Paper (1997) (www.info.gov.za, accessed 26-8-2013) (White Paper, 1997), which uses the definition set in the International Labour Organisation (ILO) Convention 159, a person with disabilities is: ‘An individual whose prospects of securing and retaining suitable employment are substantially reduced as a result of physical or mental impairment’ (ILO: No 159 – Vocational Rehabilitation and Employment (Disabled Persons) Convention (1983), part 1, art 1, www.ilo.org, accessed 26-8-2013).

The overarching legislation in this regard is, however, the United Nations Convention on the Rights of Persons with Disabilities 2007 (to which South Africa is a signatory). The preamble states that: ‘Recognising that disability is an evolving concept and that disability results from the interaction between persons with impairments and attitudinal and environmental barriers that hinders their full and effective participation in society on an equal basis with others’ (www.un.org, accessed 26-8-2013).

The EE Act defines ‘people with disabilities’ as: ‘[P]eople who have a long-term or recurring physical or mental impairment which substantially limits their prospects of entry into, or advancement in, employment.’

There is a range of disabilities and persons with disabilities range from moderate to severe disabilities, as well as temporary and permanent disabilities.

What is the percentage of persons with disabilities?

The White Paper (1997) states that ‘there is a serious lack of reliable information about the nature and prevalence of disability in South Africa’ and records the Central Statistical Service’s finding that ‘[a] 1995 estimate puts disability prevalence in our society at 5% of the population’.

This percentage is the percentage of all people with disabilities. The Association of Persons with Disabilities in Port Elizabeth estimates the employable population of persons with disabilities (age and ability wise) to be at approximately 50%; this estimates the employable percentage to be approximately 2,5% of the population. Why then is the number of people with disabilities employed only 1,4%? (13th Commission for Employment Equity Annual Report, 2012 – 2013) (13th report).

The EE Act

In terms of ch 3, which deals with affirmative action, the EE Act states: ‘Every designated employer must in order to achieve employment equity, implement affirmative action measures for people from designated groups in terms of this Act.’

One such designated group is people with disabilities and the employment equity that the EE Act aims to achieve is equitable representation in all occupational categories and levels in the workforce. Further to this, and in terms of s 54(1)(a) of the EE Act, the Minister of Labour issued, on the advice of the Employment Equity Commission, the Code of Good Practice: Key Aspects on the Employment of People with Disabilities.

The BBBEE Act

Without considering the complexities of BBBEE but simply looking at the generic scorecard of the BBBEE Act, focusing on employment equity and skills development, the targets set to be achieved by year five and then again by year ten are notable with reference to black people with disabilities.

For employment equity in terms of the BBBEE Act, the relevant measure is black people with disabilities. To be awarded full BBBEE points for the zero-to-five-year period, the measured entity needs to have employed 2% of its total workforce as black people with disabilities. To be awarded full BBBEE points for the six-to-ten-year period, the measured entity needs to have employed 3% of its total workforce as black people with disabilities. The value of reaching these targets is two BBBEE points.

For skills development in terms of the BBBEE Act, the skills development expenditure on learning programmes, as specified for black employees with disabilities as a percentage of the leviable amount, is 0,3%. This, in effect, means that to receive maximum BBBEE points here, the measured entity must use 0,3% of its leviable amount on (so specified) learning programmes for black employees who have disabilities. The value of reaching these targets is three BBBEE points.

Putting these points into perspective, table 1 on the next page, sets out where all of the BBBEE points are allocated.

Non-compliance

In terms of enforcement of the EE Act, as set out by Ivan Israelstam, (‘Why employers cannot ignore equity laws’, www.labourguide.co.za, accessed 26-8-2013) ‘the penalties for non-compliance are extremely harsh and include a maximum fine of R 500 000’.

Failure to meet the targets/compliance of the BBBEE Act simply means that points are not achieved. BBBEE points are very valuable in the procurement process, because the higher the BBBEE points, the more enticing a procurement partner is, as the buyer will then earn more points from doing business with it.

Table 1

Ownership

20 points

Management control

10 points

Employment equity

15 points

Skills development

15 points

Preferential procurement

20 points

Enterprise development

15 points

Socio-economic development

5 points

Table 2

Level

Percentage representation of people with disabilities

Top management

1,8%

Senior management

1,6%

Professionally qualified

1,6%

Skilled level

2,3%

Table 3

2002

2004

2006

2008

2010

2012

1%

0,6%

0,7%

0,7%

0,8%

1,4%

The effect of this legislation

The 13th report reflects on the status of employment equity in the country covering the period from 1 April 2012 to 31 March 2013. The final part of the trend analysis, s 4 following table 3 of the report, focuses specifically on the workforce profile of employees who are people with disabilities. It states the following:

‘People with disabilities accounted for 86 481 or 1,4% (total disability/total workforce) of the total number of employees (6 153 334) reported by all employers in 2012.’

The levels at which persons with disabilities are employed, according to the 13th report, are shown in table 2 above.

Is this an improvement?

The 13th report shows the trends for workforce profile of people with disabilities from 2002 to 2012 for all employers (see table 3 above).

To the end of this period the effects of the above-mentioned legislation had not been felt. There has been little increase in representation of people with disabilities in the workforce. The 13th report poignantly refers to it as the ‘minuscule increase of 0,4% from 1% in 2002 to 1,4% in 2012’. It does, however, go on to say that: ‘This jump in the representation of people with disabilities is very encouraging and could be very promising if we continue in the manner at which employers were able to achieve in the 2012 reporting period.’

This, however, must be viewed in light of what was stated in the 12th Commission for Employment Equity Annual Report 2011 – 2012 (12th report), and reiterated in the 13th report, being that: ‘It is critical to note that Government initially set the target of 2% representation for people with disabilities in the Public Service to be reached by 2005, which was subsequently changed to 2010 and 2015 respectively because of under achievement.’

It should also be kept in mind that the targets set in the BBBEE Act (albeit for the zero-to-five-year period) is 2% of the entity’s total workforce as black people with disabilities.

The way forward

The two proposals for the future of employment for people with disabilities, as contained in the 12th report, are simple and remain applicable:

Much more has to be done to increase the representation of people with disabilities in the workforce.

Employers should prioritise employment of people with disabilities at the level of skilled worker. As stated in the 13th report, when looking at the workforce profile at the skilled level, the representation of workers with disabilities is 2,3%: ‘Very good progress is being made at this level, which should serve as a feeder to all the other upper levels.’ This must be continued.

The Labour Minister’s response to the report states (here with reference to people with disability only) that: ‘The report called for early interventions to capacitate people with disabilities to enter and progress in the job market. These should include recognition of prior learning, experience training, vocational rehabilitation, reasonable accommodation and any other training interventions, including learnerships’ (Lloyd Ramutloa ‘Oliphant laments slow pace of workplace equity’ (2011), www.labour.gov.za, accessed 23-8-2013).

According to the White Paper (1997) ‘[o]ne of the greatest hurdles disabled people face when trying to access mainstream programmes is negative attitudes. It is these attitudes that lead to the social exclusion and marginalisation of people with disabilities’.

The proposed Employment Equity Amendment Bill (as introduced in the National Assembly (proposed s 75); explanatory summary of the Bill, GG35799/19-10- 2012) contains far harsher penalties for non-compliance than those contained in the existing EE Act. As set out in the proposed sch 1, the maximum permissible fines that may be imposed for contravening certain provisions of the proposed Act – currently R 500 000 – could be as much as ‘the greater of R 1 500 000 or 2% of the employer’s turnover’.

The White Paper (1997) implores that ‘we must stop seeing disabled people as objects of pity but as capable individuals who are contributing immensely to the development of society’. To this end it states that what is required is, inter alia, public education and awareness raising and it states that ‘[p]ublic education and awareness are central to the changing of attitudes’.

We need to train and be trained so that we are more understanding of the situation of people with disabilities, as well as how to interact with people with disabilities.

But does all of this mean that employers will do what is right and good? If they had any intention to do so, there would be no need for any of the legislation.